The Sad Finale For Firetide (Unicam Acquires)

It was inevitable.

After burning through ~$50 million over the past decade, the former poster boy for wireless video surveillance, Firetide, has been acquired by a salvage specialist.

In this note, we examine what happened to Firetide, what the acquirer does and what this means for wireless video surveillance.

Unicom Global

Unicom Global, a peculiar company, acquired Firetide for an undisclosed amount of cash (though we doubt it was more than a 1/10th of what Firetide raised).

This Unicom is a privately held conglomerate and should not be confused with the Chinese multi-billion telecom giant.

They buy up lots of companies, frequently distressed and typically within IT. For example, after the US federal government suspended integrator GTSI from selling to them, Unicom bought them and made it their government division. Another deal example is US Robotics, the once powerful, but long since faded, dial up modem manufacturer.

Unicom offers little public information on their business practices or revenue but former employees explained the aftermath of acquisitions thusly:

"Shortly after being acquired our company IET Solutions saw dramatic changes forced upon us by the Unicom Management team. In an effort to improve margins we stopped developing our product, the QA organization was let go, and even the product/customer support group was terminated. The office in the US was reduced to 3 staff members."

and "Stop trying to grow by acquisition and take care of your clients. Buying distressed firms (USRobotics, GTSI, etc.) just makes things worse. The founder-president-CEO needs to stop thinking he is the smartest man in the universe, and actually listen to people who work for him."

The upside is that the company may be good at digesting these distressed companies and making smaller scale profitable business units out of them. Unicom can and will likely cross sell Firetide to other Unicom units (such as the former GTI) while slashing Firetide's cost structure to maximize profitability.

The downside is that any dream of expansion, or even broad use of Firetide, seems unlikely.

Why Did This Happen?

No one has ever made mesh mainstream for video surveillance. The main causes were (1) too complicated to make work by non-experts, (2) too costly for products (10x+ more than PTP like Ubiquiti) and (3) too much of a niche for surveillance (only the biggest 10% or 20% really needed mesh. This is reflected in our newest 2014 wireless video surveillance favorites.

Firetide had already been facing that reality for years as the good times of raising big money had long past (the last big raise was back in 2009). Indeed, even the new CEO (from Cisco) in 2013, was evidently content or constrained to stay their more modest course.

And now they are a division of cleanup conglomerate.